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Study: Charges at Boulder County hospitals vary dramatically

Hospital officials say charges are much different from actual amounts paid

By Brittany Anas Camera Staff Writer

Posted:
07/06/2013 06:00:00 PM MDT

Average charges at Boulder County hospitals

Spinal fusion, not including neck, without major complication:

Boulder Community Hospital -- $194,571

Exempla Good Samaritan Medical Center -- $200,116

Longmont United Hospital -- $128,856

Heart pacemaker with complication:

Boulder Community Hospital -- $107,220

Longmont United Hospital -- $55,342

Major joint replacement or reattachment of lower limb without major complication:

Boulder Community Hospital -- $76,263

Centura Health Avista Adventist Hospital -- $61,605

Exempla Good Samaritan Medical Center -- $76,730

Longmont United Hospital -- $53,053

(In some categories, hospitals don't report data because they don't perform those procedures, or don't perform enough to have an average.)

Source: Colorado Center on Law and Policy

Charges for services at Boulder County hospitals vary dramatically, according to a new analysis that seeks to bring more transparency to health care.

When stacked up against other hospitals in Colorado, Exempla Good Samaritan in Lafayette charges -- on average -- 21 percent more than the statewide average, according to the new report from the Colorado Center on Law and Policy. Boulder Community Hospital charges 7 percent more than the statewide average, and Longmont United Hospital charges 3 percent more than the norm.

"We need to recognize the healthcare market is broken and work on increasing transparency," said Kyle Brown, a senior health policy analyst for the Colorado Center on Law and Policy. "We need to come up with some Colorado-based solutions to help lower costs."

Officials from Boulder County's hospitals, though, say there are a variety of factors that contribute to differences in sticker prices, and there may be fewer variations when it comes to the actual amounts paid by patients.

"What hospitals charge and what they are paid are two very different things," said Bill Munson, chief financial officer of Boulder Community Hospital.

At Boulder Community, for example, the hospital is paid, on average, about 26 percent of what it charges.

Brown said the law and policy center will be working with policymakers, legislators and hospital officials to help understand what's driving the costs and how to make the healthcare system more consumer-friendly.

The center's report, "Our Dollars, Our Health," shows that charges to treat the same condition can routinely differ by tens of thousands of dollars -- even within the same county. In general, the report found, Colorado's urban and suburban hospitals charge more than hospitals in rural areas.

"Health care is not a car," Brown said. "You can't always shop around and find the best services. If you're sick -- or in an emergency -- you go to the nearest emergency room, and only afterwards do you find out what it cost."

In May, the Centers for Medicare and Medicaid Services published the first-ever national data set detailing what hospitals charge for their services. It included the average amounts Colorado's hospitals charged Medicare for the 100 most common procedures in 2011, allowing the public to analyze hospital costs.

Some stark differences: Boulder Community Hospital charged $107,220 for a heart pacemaker for a patient with a complication, while Longmont United charged $55,342.

But what the government-sponsored program actually reimbursed for those procedures was closer: $15,763 at Longmont United, and $18,396 at Boulder Community.

The fact that Boulder was paid more for the same service could mean the severity of complications among Boulder Community's patients was greater.

"What consumers really want to know is how much is going to be paid to the hospital -- not what the charges are," Munson said. "That makes the data relatively meaningless to the average consumer."

Boulder Community is the only hospital in Boulder County that performs open-heart surgeries.

Some charges without major complications seem to vary less, Munson said.

For example, a spinal fusion -- not including the neck -- without a major complication varies from $128,856 at Longmont United to $200,116 at Exempla Good Samaritan.

Munson said there are several factors that contribute to the differential pricing, including the level of charity and indigent care; the scope of services provided by the hospital; the degree of underpayments from Medicare and Medicaid; and negotiated payment rates from insurance. Costs could also vary based on the severity of cases -- for example, counties serving older populations or a higher-than-average proportion of people with diabetes may have higher pricing.

Rich Sheehan, a spokesman for Boulder Community Hospital, said the hospital urges people to call their insurance company to find out what their financial responsibility is going to be for procedures.

At Boulder Community, the 2013 operating margin is about 2.5 percent. In a year, the hospital covered $61 million in unreimbursed -- or under-reimbursed -- charges, according to hospital officials. Those unmet charges result from several factors including underpayment from Medicare and Medicaid, debt forgiveness or a patient defaulting on a loan.

Cheston Turbyfill, speaking on behalf Exempla Good Samaritan, said hospital charges offer little insight into what is actually paid for the cost of care.

"In fact, hospital chargemasters are a decades-old requirement for participating in Medicare and are in the process of being phased out," Turbyfill said. "The focus should be on what hospitals actually receive in payment."

In 2012, Exempla provided more than $7 million in unreimbursed medical care for the community, he said.

Cheryl Cure, chief financial officer for Avista Adventist Hospital, where costs are below the statewide average, echoed that the hospital's charges are rarely what's paid for a service because most payments for health care are based on negotiated rates or a government fee schedule.

For uninsured patients, the hospital offers discounts on a sliding scale based on the patient's ability to pay.

"We review our charges for all hospital services on an annual basis and adjust our charges to reflect any changes in the cost of care," she said.

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